Total net income attributable to owners of the parent improved 26.6 percent to SEK 6,587 million (5,205) and earnings per share to SEK 1.52 (1.20). Total net income fell 12.5 percent to SEK 6,834 million (7,812).

Comments by Johan Dennelind, President & CEO

“Dear shareholders and Telia followers, we are now half way through 2017 and have a better visibility on the full year results and our cash flow generation. Even if, frankly speaking, EBITDA in the quarter disappoints for Sweden, we reiterate our EBITDA outlook for the full year based on strong performance elsewhere, notably Norway, and the initiated cost activities that are coming through in second half of 2017. With our other operational free cash flow activities yielding well, we are now able to say that we will be above SEK 7.5 billion for the full year (previously above SEK 7.0 billion). Furthermore, I am very pleased that we managed to secure a dividend decision in Turkcell. Combined with MegaFon associated companies will contribute by around SEK 2.8 billion to our 2017 cash flow. All in all, this means that our free cash flow will be comfortably above SEK 10 billion 2017.

Let us talk more about costs. During the second quarter 2017 we have launched initiatives to reduce our cost base, just as we indicated in the first quarter. The main impact will be in Sweden where the operational expenses are still too high. We plan to reduce our total external and internal resources by roughly 850, around 3 percent of total resources. Of the resources reduced 650 are related to Sweden, equal to 8 percent of the Swedish resources. The initiatives are expected to impact costs already in the second half of 2017 by a reduction of approximately 5 percent in Sweden year on year. We have also initiated medium term structural initiatives that will drive further cost reductions supporting EBITDA in 2018 and 2019. This is expected to result in a reduction of the targeted cost base of at least 3 percent 2018. This is vital for a competitive Telia Company as we still see pressure on our legacy revenues and as anticipated falling one-off revenues from fiber. Our ambition is clear, we aim to grow our operational free cash flow every year in order to support a growing dividend over time.

It is becoming more difficult to deliver on the fiber demand still prevailing, even if our 1.9 million household target is intact for end 2018. We are still the leading and driving force in Sweden for this but we now start to reach the tail of the fiber roll out potential. We struggle with permit and intermediary related issues in connecting households to our fiber network. Some of the roll out challenge is also related to shifts in the market dynamics, which have led to longer delivery processes. Given that the second quarter is traditionally a quarter where many households are connected, these issues had a clear negative impact on revenues and profitability. This, combined with increased operational expenses, are the two main reasons why our EBITDA is declining 3 percent in the second quarter. The main risk on our EBITDA guidance is related to the timing of connecting households to fiber and the related revenues in the fourth quarter.

Norway, yet another proof of our commitment to bring the best quality to our customer by being rewarded the best mobile network for the second consecutive year. We are pleased with the performance in Norway for the second quarter, delivering a continuous strong EBITDA growth, won one of two 900 MHz spectrums, closed the Phonero acquisition adding 246,000 subscriptions and will bear fruit with at least SEK 400 million in synergies in 2018.

In Finland we feel good about the momentum building after the rebranding to Telia, acquisition of Nebula and through the opportunities in creating a great consumer offering with the acquired rights to the Finnish hockey league. We expect Telia Finland to step up to its potential the coming years.

The second quarter of 2017 we increased our execution of the Nordic & Baltic strategy, mainly through M&A. On top of Nebula in Finland we acquired a small but leading Artificial Intelligence company, Humany in Sweden. Further on M&A we have received the needed approvals and finalized the divestment of Sergel. We have reduced our direct ownership in Turkcell, as it has no impact on the overall solution for Turkcell Holding.

Regarding the divestment of the remaining operations in Eurasia there are progress being made in the process. We reiterate that our best estimate is that the assets will be disposed during 2017. We continue our discussions with the DoJ, SEC and the Dutch authorities about our resolution of their investigations and we are hopeful that we will be able to achieve it soon. We remain comfortable that our adjusted provision communicated in our first quarter report is our best estimate of the financial sanction we will be required to pay.

The strong cash flow and the divestments of and dividends from associated companies have strengthened the balance sheet. Our net debt to adjusted EBITDA is now at 1.36x. This is below our target of 2x (+/- 0.5x). If we add upcoming second tranche dividend of SEK 1 per share to be paid and associates’ dividends to be received, known acquisitions as well as the provision for the fine related to Uzbekistan the pro forma number would be 1.8x.

We keep on shaping the new Telia in the Nordics and Baltics, while we work relentlessly to ensure a balanced exit from Eurasia in order to fully focus on the next phase of Telia Company.”

Johan Dennelind, President and CEO

This information is information that Telia Company AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:00 CET on July 20, 2017.

Forward-Looking StatementsStatements made in the press release relating to future status or circumstances, including future performance and other trend projections are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to many factors, many of which are outside the control of Telia Company.

We’re Telia Company, the New Generation Telco. Our 21,000 talented colleagues serve millions of customers every day in one of the world’s most connected regions. With a strong connectivity base, we’re the hub in the digital ecosystem, empowering people, companies and societies to stay in touch with everything that matters 24/7/365 - on their terms. Headquartered in Stockholm, the heart of innovation and technology, we’re set to change the industry and bring the world even closer for our customers. Read more at http://www.teliacompany.com/.

About Us

We’re Telia Company, the New Generation Telco. Our approximately 20,000 talented colleagues serve millions of customers every day in one of the world’s most connected regions. With a strong connectivity base, we’re the hub in the digital ecosystem, empowering people, companies and societies to stay in touch with everything that matters 24/7/365 - on their terms. Headquartered in Stockholm, the heart of innovation and technology, we’re set to change the industry and bring the world even closer for our customers. Read more at www.teliacompany.com